American Insurance Company v. Canter (1828)
In American Insurance Company v. Canter (1828) 26 U.S. 511, Chief Justice Marshall remarked, "`the judges both of the supreme and inferior court, shall hold their offices during good behavior.' The judges of the superior courts of Florida hold their offices for four years. These courts, then, are not constitutional courts, . . ." Id. at 546. Canter then suggests that the qualities of life tenure and undiminishable salary define an Article III court. The bankruptcy court is an Article I court under this view.
The Supreme Court, declared that the class of cases falling within the "arising under" clause were wholly distinct from those included within the phrase "admiralty and maritime Jurisdiction" within the meaning of the Constitution.
Chief Justice Marshall, referring to territorial courts, said at p. 546:
"These courts, then, are not constitutional courts, in which the judicial power conferred by the constitution on the general government, can be deposited. They are incapable of receiving it. They are legislative courts, created in virtue of the general right of sovereignty which exists in the government, or in virtue of that clause which enables congress to make all needful rules and regulations, respecting the territory belonging to the United States." Mr. Chief Justice Marshall held that the non-article III territorial courts of Florida could hear cases governed by admiralty and maritime law in addition to local controversies, even though those cases were ordinarily heard only by article III judges.
In support of his holding that admiralty and maritime claims were not identical with claims arising under the Constitution and laws of the United States, Chief Justice Marshall made the following statement:
"We are therefore to inquire, whether cases in admiralty, and cases arising under the laws and Constitution of the United States, are identical. "If we have recourse to that pure fountain from which all the jurisdiction of the Federal Courts is derived, we find language employed which cannot well be misunderstood. The Constitution declares that `the judicial power shall extend to all cases in law and equity, arising under this Constitution, the laws of the United States, and treaties made, or which shall be made, under their authority; to all cases affecting ambassadors, or other public ministers, and consuls; to all cases of admiralty and maritime jurisdiction.' "The Constitution certainly contemplates these as three distinct classes of cases; and if they are distinct, the grant of jurisdiction over one of them does not confer jurisdiction over either of the other two. The discrimination made between them, in the Constitution, is, we think, conclusive against their identity."
The Court observed that Art. IV bestowed upon Congress alone a complete power of government over territories not within the States that constituted the United States.
The Court then acknowledged Congress' authority to create courts for those territories that were not in conformity with Art. III. Such courts were "created in virtue of the general right of sovereignty which exists in the government, or in virtue of that clause which enables Congress to make all needful rules and regulations, respecting the territory belonging to the United States. The jurisdiction with which they are invested . . . is conferred by Congress, in the execution of those general powers which that body possesses over the territories of the United States. Although admiralty jurisdiction can be exercised in the states in those Courts, only, which are established in pursuance of the third article of the Constitution; the same limitation does not extend to the territories. In legislating for them, Congress exercises the combined powers of the general, and of a state government.".
In sum, Justice Marshall was considering the question whether the Florida territorial court could exercise admiralty jurisdiction assuming that Congress had vested such jurisdiction in that court. Justice Marshall said that the Florida courts in question were not constitutional courts in which the judicial power could be deposited because they are incapable of receiving the power. He went on to say that the Florida courts are legislative courts and that the jurisdiction they exercise was conferred by Congress as a part of its power to govern territories of the United States. This decision suggests that only Congress may create a tribunal capable of exercising non-Article III power, not the courts.